Emily's list: prepaid card fee edition

The other day, I was reading the website of my local newspaper, The Austin American-Statesman. There was an article about a local prepaid debit card company, NetSpend, partnering with entertainment company BET Networks. I checked out the official press release, and it turns out the companies are partnering to offer a new prepaid MasterCard, the Control Card, geared towards "millions of African Americans who are either unbanked or underbanked."

In the press release, NetSpend adds that "nearly 22 percent of African American households do not have bank accounts." I love supporting a local business, and that sounds mighty admirable, but it turns out it's not such a great deal.

Cardholders pay a $7.95 monthly account fee, plus a $2.50 fee for every ATM withdrawal (plus any ATM owner fees). An instant bank transfer costs $1.95 (though it's free if you don't mind waiting a few days), and you're charged a 50 cent fee every time you make a balance inquiry on the phone or at an ATM.

If you direct deposit at least $500 in a calendar year, you're upgraded to the "discount fee plan," in which your monthly account fee goes down to $5. The only other difference with this plan is that it's free to check your balance with the automated toll-free phone number, though you'll still pay if you want to talk to a person or check on an ATM. The card does have a cash-back program and, fortunately, there is a $10 "purchase cushion" that protects cardholders if they go $10 over their limit.

Prepaid credit cards can be a good starting place if you never had credit or have bad credit and can't qualify for a standard card. But with those fees, it seems that these companies are just taking advantage of people who are already down and out. What do you think?

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